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When an anticipated bestselling novel is released, how is it that the book arrives at residences and retailers across the world in synchronized fashion? Think about the swine flu vaccine and the challenges of transporting millions of doses around the U.S. in time to avoid a further pandemic. What about the hot, new video game, the latest fashion, or the groceries at the local supermarket? The answer to all of these challenges is “supply chain management.”

 

Consider the enormous challenges of distributing 250 million swine flu doses to medical facilities around the U.S. This is in addition to the 100 million doses of vaccine that the U.S. typically distributes this time of year for the regular flu. Let’s stay with the swine flu for the moment. The U.S. has purchased 250 million doses from five different manufacturers. Doses will be shipped as they become available. The first batch is anticipated to be about six million doses which should be released from the distribution centers owned or contracted by the manufacturers in the next few weeks. These doses will be distributed to each state and the state must redistribute the vaccine doses to medical facilities for deployment on a priority basis. One or more people at these manufacturers are responsible for supply chain execution that insures timely delivery to every location with visibility along the way. Once their job ends, supply chain professionals employed by each state will need to undertake similar steps to insure the vaccine arrives at all of the medical facilities on a timely basis.

 

The supply chain manager’s challenges are often staggering. The fun begins long before shipping occurs. In basic terms, supply chain management starts with locating vendors for all of the materials needed to manufacture the product. This includes packaging and labeling. The process also entails issuing purchase orders and tracking the orders through the fulfillment phase continuing with transportation with tracking visibility to the proper receiving facility. Supply chain management encompasses inventory management for raw materials, finished goods and work-in-process. Knowing how much of each item to keep in each warehouse across the country is critical to avoid stockouts and backorders resulting in unhappy customers. Outbound distribution comes next which involves transportation and sometimes, short stays in third party warehouses before the ultimate delivery is coordinated to the final destination. With all of this, many products have extra procedures related to being perishable, hazardous, time sensitive or subject to one or more government regulations. Many customers require advance ship notices via various electronic means. The supply chain manager must flawlessly choreograph strategy to handle all of these complex and varied functions with means to set metrics and conduct measurements to insure success.

 

Sounds easy, right?

 

Guess again.

 

Now come back to those 250 million doses of swine flu vaccine or that bestseller release or the groceries in your local market. Understanding the processes and technology involved in supply chain management offers the layman a new perspective on everything you buy at the retail level.

 

Many companies view supply chain as series of processes and related costs. Successful companies manage supply chain and its supporting technology as a means with which to compete more effectively. Third party management is available for the small and mid-sized company looking to grow to the next level. Establishing an effective supply chain infrastructure is crucial for any company. For a developing company, it should be a top priority. A company’s growing profit margin can be quickly strangled by a weak supply chain foundation. After all, you wouldn’t build a house on shifting sand, would you?

 

 

Sam Polakoff is president of TBB Global Logistics, Inc., a 63-year-old supply chain management firm specializing in the needs of small and mid-sized clients. Sam can be reached by email at srpolakoff@tbbgl.com or by phone at 717-227-5540.